Is life Insurance allowed?

Mu` meneen Brothers and Sisters,

As Salaam Aleikum wa Rahmatullahi wa Barakatuh. (May Allah`s Peace, Mercy and Blessings be upon all of you)

One of our brothers/sisters has asked this question:

AS Salam U Alaikum,

Dear brother in Islam,

I want to ask you about Islam's opinion on life insurance.

Buying a life insurance policy so as to leave something, when one passes away, for one's loved ones (called beneficiaries) who could be one's  siblings or children. Usually the policy holder pays premiums depending on the face value of the policy and the designated beneficiaries receive some  money should the policy holder die from a natural cause or accident.

I want to be comfortable that the money I pay for this is ok and not haram.

hank you & God bless you.

(There may be some grammatical and spelling errors in the above statement. The forum does not change anything from questions, comments and statements received from our readers for circulation in confidentiality.)


Life Insurance

In the name of Allah, We praise Him, seek His help and ask for His  forgiveness. Whoever Allah guides none can misguide, and whoever He allows to fall astray, none can guide them aright. We bear witness that there is no one (no idol,  no person,  no grave, no prophet,  no imam,  no dai,  nobody!) worthy of worship but Allah Alone, and we bear witness that Muhammad(saws) is His slave-servant and the seal of His Messengers.


The present conventional insurance format as practiced in the modern world is predominantly interest-based,  and Allah and His Messenger (saws) have clearly forbidden the concept of ‘riba’ and interest in Islam.   Besides,  a believer is commanded to put his trust in Allah Subhanah;  and with the present concept of conventional insurance,  one puts his trust on the insurance he has taken out in case of a calamity.


The concept of Insurance itself is not declared haraam,  and there are ways to be Islamically insured in the modern world through one of the many Islamic Insurance Companies,   who adhere to the principles laid down in the Shariah.   


The concept of insurance as we understand it today was not available at the time of the Prophet (saws).   The scholars of Islam are unanimous in their opinion,  that in light of the guidance of the Quran and Sunnah,   the concept of conventional life-insurance is absolutely forbidden and impermissible for the believers,  who sincerely fear Allah and the Last Day. 


Your Statement:  I want to be comfortable that the money I pay for this is ok and not haram.

The money that you pay as premium is not in itself haraam,  because you have earned the money that you pay through halaal means.    It is the amount of money (over and above what you have paid as premiums) that you or your inheritors would receive,  which would be haraam!

Whatever written of Truth and benefit is only due to Allah’s Assistance and Guidance, and whatever of error is of me.  Allah Alone Knows Best and He is the Only Source of Strength.

Your Brother in Islam,


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